Chrysler to be sold, spare change anyone?

[bovw]

http://www.msnbc.msn.com/id/18645179/

 

[jim-00-4.6]

Eighty percent of Chrysler Group, burdened by high pension and health costs and declining market share in the United States, will be sold to Cerberus Capital Management, which is taking a huge risk by agreeing to take on billions of dollars in pension and retiree health care costs at Chrysler.
gee. Do you think they'll somehow manage to dump the pension expenses on the federal government?

 

[JeffM]

Eighty percent of Chrysler Group, burdened by high pension and health costs and declining market share in the United States, will be sold to Cerberus Capital Management, which is taking a huge risk by agreeing to take on billions of dollars in pension and retiree health care costs at Chrysler.
gee. Do you think they'll somehow manage to dump the pension expenses on the federal government?

Nah I can't see that happening ...... With John Snow at the helm

 

[flyfisher11]

Eighty percent of Chrysler Group, burdened by high pension and health costs and declining market share in the United States, will be sold to Cerberus Capital Management, which is taking a huge risk by agreeing to take on billions of dollars in pension and retiree health care costs at Chrysler.
gee. Do you think they'll somehow manage to dump the pension expenses on the federal government?

No shit! They should move the entire operations down south (non-union).

 

[MarkP]

Daimler took a bath. They paid $37 billion nine years ago. They got &7.4 billion for 80 percent.

All the car manufacturers need to position their cost structure to compete with the sub-$10K vehicle. Gut feel says that vehicles will include increasing levels of electronics to enable the same cost reductions you see with electronics. Chryslers cost structure will not support this transistion of auto manufacturing.

The tell will be who Chrysler is sold to. GM or Chery?

 

[Darren M.]

They need to call Lee Iacocca and Carroll Shelby back to get that company straightened out. Chrysler damn near bankrupted Daimler.

 

[Justin Kurosaki]

I'm sure they will do like most of debt laden corporations do and dump their pensions... Or they will file for re-org which will effectively do the same thing. Heck, many large corporations are dumping pensions all together in favor of plain 401k's (knowing they won't have to match what employees don't contribute).

The question is: can they legally do this (re-org) without getting sued by the pension holders. I.e. could Cerberus be held liable if they knowingly bought a company just to send it to chapter 11 to make their investment pay off.

 

[cmoore207]

IMHO, Chrysler/Dodge have done a much better job over the past 10 years of bringing "exciting" product to market with upscale exterior/interior designs. My mom used to have a '01 LHS with the high output 3.5 V6 from the Prowler; for such a land yacht that thing could haul ass.

Look at the last ten years for Chrysler and the stuff they have brought to the mainstream market. PT Cruiser, Prowler, the beautiful Concord, LHS/300M, 300C/Charger/Magnum, some really nice Grand Cherokees, the Crossfire, etc etc.

In the mean time, what have Ford and Chevy brought us? The Five Hundred? The Malibu Maxx?

Granted, all of the big three are in a bad way, but I just don't get how Chrysler was never able to gain steam.

 

[jsonova99]

Why can't they just can everybody and move production overseas or hire all non-union workers like Toyota does here? I realize this is a naive and impossible idea, but I'm trying to figure out why the big three can't think outside the box and try something drastic and radical to fix themselves. They can't sustain themselves forever at this rate. They're all slowly dying and don't seem to have any idea how to fix themselves. Just seems like more of the same isn't cutting it, time try someting new.

 

[MarkP]

The big 3 cost structures are out of wack with today's competitive market. Medical and pension cost are killing them. That money then is not available for R&D into new technologies and manufacturing processes. Cerberus will probably try and buy out the Unions contract like was done with Goodyear and the steelworkers. In those deals the union was given a lump sum and took over responsibility for future health care cost.

The unions are dead. Non-union Toyota employees in TN make more than union employees in Michigan. The Toyota employees have no use for unions.

As for pension and medical cost in general companies are moving to 401Ks and incentivized medical plans. The public sector is next group to see significant problems and cost reductions. Public sector compensation cost are out of alignment with the private sector.

 

[MarkP]

Example of what R&D can do - and why Chrysler needs to restructure cost.

Toyota says hybrid cost premium to disappear

TOYOTA CITY, Japan (Reuters) - Toyota Motor Corp. expects to cut costs for hybrid cars enough to be able to make as much money on them as it does on conventional gasoline cars by around 2010, a top executive said on Thursday.......​

side news in post

http://www.nanotech-now.com/news.cgi?story_id=22550

High-Capacity Lithium-Ion Batteries On the Way

Abstract: This new generation of lithium-ion batteries, shown at a meeting of the Electrochemical Society, earlier this week, uses a series of impressive new technologies, like nanotechnology, to create the composite materials for generating the electrodes on the cells inside the battery. So far, scientists have managed to measure twice the charge storage capacity in the new batteries, and they estimate that manufacturing costs will be lower than traditional lithium-ion batteries because of the materials (primarily manganese) required for the new nano-crystal electrodes.​

 

[az_max]

High-Capacity Lithium-Ion Batteries On the Way

As long as Sony doesn't make them, you're safe!

 

[MarkP]

All the car manufacturers need to position their cost structure to compete with the sub-$10K vehicle. Gut feel says that vehicles will include increasing levels of electronics to enable the same cost reductions you see with electronics. Chryslers cost structure will not support this transistion of auto manufacturing.

Along these lines . . . Are electronics making cars obsolete faster?

If just about any part breaks on your 1971 Volkswagen Beetle, you could probably get a replacement from a hundred different outlets. If the black box goes out on your 1996 Lincoln Mark VIII, your car becomes little more than a giant paperweight. With the profusion of different cars and the electrical components that go in them, automakers would face an inventory nightmare if they tried to stockpile all of the necessary replacement parts. So in order to avoid that scenario, once the warranty runs out, they simply stop making the parts. . .​

Making parts for only the warranty period seems a lot shorter than in the past. Why pay $50K+ for a vehicle that is obsolete/can't find parts for, in 3-5 years? Depreciation schedules will begin to reflect this accelerated schedule. Ouch. Junk yards are going to proliferate.

I have several older cars. They are easy to get parts for. Once a vehicle hits 20+ years old the secondary market manufacturers come online but most people won't wait that long. Plus I suspect the secondary market may not offer the on-board computers. Hopefully you can live with the defeatured vehicles once the electronics fails.

Now think of the new Land Rovers and where they are going with electronics.

 

[az_max]

Along these lines . . . Are electronics making cars obsolete faster?

If just about any part breaks on your 1971 Volkswagen Beetle, you could probably get a replacement from a hundred different outlets. If the black box goes out on your 1996 Lincoln Mark VIII, your car becomes little more than a giant paperweight. With the profusion of different cars and the electrical components that go in them, automakers would face an inventory nightmare if they tried to stockpile all of the necessary replacement parts. So in order to avoid that scenario, once the warranty runs out, they simply stop making the parts. . .​

Making parts for only the warranty period seems a lot shorter than in the past. Why pay $50K+ for a vehicle that is obsolete/can't find parts for, in 3-5 years? Depreciation schedules will begin to reflect this accelerated schedule. Ouch. Junk yards are going to proliferate.

I have several older cars. They are easy to get parts for. Once a vehicle hits 20+ years old the secondary market manufacturers come online but most people won't wait that long. Plus I suspect the secondary market may not offer the on-board computers. Hopefully you can live with the defeatured vehicles once the electronics fails.

Now think of the new Land Rovers and where they are going with electronics.

very much related to that:



OnStar going silent on millions of vehicles

A decision by the Federal Communications Commission that allows all cell phone companies to turn off their analog networks beginning in February of 2008 means that nearly two million people, or half of OnStar's entire subscription base, will soon find the other end silent when they press that blue button on their vehicle's dash

Still, the FCC ruled on the sunsetting of analog networks all the way back in 2002, and for two years General Motors continued selling vehicles equipped with analog equipment that it knew would become obsolete

 

[MarkP]

very much related to that:

OnStar going silent on millions of vehicles

Verizon should jump all over that.

In other vehicle related news the Nav systems are accelerating depreciation rates. When new, in-vehicle Nav systems are expensive. Old Nav systems are next to worthless. Dead weight.

Why not get all the hand-held companies together and come up with a in-vehicle plugable standard?